A blog by Michael Truitt
Studies have shown that employee theft and embezzlement cost the U.S. economy as much as a billion dollars every year. And now, unfortunately for you and every other employer, current economic conditions and easy access to casino gambling are increasing employees’ temptation to take what does not belong to them.
Do you consider your business immune to employee theft? Look at the numerous reports of embezzlement and other employee schemes that have occurred recently in North Carolina and understand that you are sadly mistaken. Expert estimate that as many as 30% of all employees do steal and that another 60%, that is 60 percent will do so if given sufficient motivate and opportunity. It only makes sense to take steps to protect your business from this big, big problem.
Taking measure to reduce the risk of employee theft is often simple and inexpensive. In some cases you will even increase productivity and create improved management-employee relations as the same time. Clear policies and division of tasks among employees make it easier for employees to be productive and to manage these employees.
Here are some simple and effective theft-prevention strategies.
· HIRE PEOPLE WITH PROVEN TRACK RECORDS. Your background checks and pre-employment screening for potential new hires for sensitive financial positions, including those who will have control of bank accounts or receipts, should be more thorough than those for other positions.
· SET AN EXAMPLE. Employees need to know that one uniform ethical standard applies to everyone. If people in management position are seen dipping into petty cash, fudging on expense accounts, or taking home equipment, everyone else will feel justified in doing the same.
· DIVIDE TASKS AMONG EMPLOYEES. Task involving the flow of funds should be assigned to several employees, not just one. For example, the person who receives and opens the mail should not be the same person who pays the bills. It is a sensible way to prevent one employee from obtaining too much authority, and it helps forestall collusion between employees or between an employee and a vendor.
· INSPECT AND AUDIT. Conduct regular inspections and audits of inventories and bookkeeping. Of course it’s a primary way to catch cheating, but it’s also much harder to detect embezzlement when books and records are sloppy, or non-existent
· KNOW THE USUAL SCHEMES. Some cheating strategies are use again and again. Keep your eyes open for forged receipts, fictitious vendors or payroll, overbilled expenses, checks made payable to cash or multiple checks to the same employees, and purchasing fraud.
· SET CLEAR POLICIES. Your employee handbook should contain a clear policy on ethical behavior, and every employee should be required to sign it. The policy should emphasize that there is no such thing as an acceptable amount of employee crime and that the amount that will be tolerated is NONE
· LOOK FOR THE SIGNS. Internal theft often leaves signs, like a sudden increase in living standards, management level personnel who insist on handling clerical task, and customer complaints about inconsistencies in billing, pricing, or shipments. Watch for them.
· EDUCATE YOUR EMPLOYEES. Use training and employee awareness programs to inform your workers about stealing problems and show them how to be on the lookout for cheating and theft.
No company is immune to employee theft. Sometimes, even a rigorous screening process does not guarantee that all hired employees are honest individuals. It is the responsibility of the company to make sure proper internal control is set up to protect it from such untoward incidents.ReplyDelete
Thank you for sharing. Employee theft in New Jersey is on the rise. Companies should take note and instill some of the policies you listed above.ReplyDelete